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Worldwide Refinery Processing Review (Quarterly Issues)

Publication date:3Q 2012
Item#: B21203

Hydrocracking and Lube Oil Production


Hydrocracking (HC) is utilized in refineries to upgrade a variety of feeds that range from coker naphtha to various gas oils and residual fractions into lighter molecules that have higher average volatility and improved economic value. Hydrocracking works to improve the quality of the initial feedstock by removing N and S and increasing the hydrogen-to-carbon ratio. As the world economy continues to stabilize following a period of recovery from the widespread economic crisis that began in 2008, refiners have been forced to adjust operations to meet a number of emerging goals: increasing diesel production, processing heavy and highly contaminated crudes, and meeting stringent environmental emissions limitations and product specifications. The hydrocracking process has emerged as the primary diesel producer in many refinery configurations, and as environmental regulations on transportation fuels continue to tighten, the hydrocracker will be one of the tools available to refiners to meet new product specifications. Unlike FCCU processes, hydrocrackers can effectively yield ultra-low sulfur diesel (ULSD) streams whereas middle-distillate range FCC products will regularly require additional treating to meet product blending specifications.

Hydrocracking technologies typically range between two extreme operational regimes. On the low-conversion end (20-40%) is mild hydrocracking that typically converts VGO to ULSD and an upgraded FCCU feed. At the other end is conventional or high-pressure hydrocracking that can achieve near 100% conversion of many different feeds to ultra-clean distillates, naphtha, and lube oil base stocks. In between these extremes are moderate-pressure schemes that trade a small measure of conversion for reductions in capital expense and hydrogen consumption. Special configurations can be set up for multi-feed processing or for converting so-called difficult feeds (high endpoint, aromatics, and nitrogen) like LCO to distillates that meet current specifications. Also, there are schemes that decouple conversion and product quality, providing additional flexibility in operations and avoiding overcracking the distillate product.

In diesel oriented refineries, heavy oil and VGO will be hydrocracked to increase the yield of diesel range streams. Companies have turned to two-stage recycle (TSR) hydrocracking and reverse-staging configurations, which have advantages and disadvantages compared to other process schemes. Methods to operate at lower conversion per pass in order to increase middle distillate selectivity are also being addressed, in addition to advances in monitoring and control. Catalyst developments aim to improve HDS activity, reduce catalytic deactivation, increase diesel yield, reduce operating pressure, and extend cycle length.

With changing market dynamics and fuel consumption patterns that heavily favor the production/use of diesel over gasoline, process designers and catalyst manufacturers are feverishly developing cost-effective and energy-efficient hydrocracking technology and revamp options to satisfy the refining industry around the world. Also, refiners will begin to rely more heavily on hydroprocessing units to produce high-quality, high-value products. Finally, the utilization of hydrocracking technologies to upgrade resid and/or renewable feeds to produce additional supplies of high-quality diesel has been covered extensively through commercial projects and R&D work over the past several years. Additionally, the hydrocracking section features the latest trends and technology offerings, including:

Lube Oil Production

The production of petroleum lube oils began in Pennsylvania, US, where paraffinic crude was used to produce lubricants to oil the wheels of the Industrial Revolution, beginning with the state's refining industry. As some of the best crude supplies in the country began to be used for gasoline production, refiners were forced to use inferior crude, unsuited to the production of valuable fuels, for lube oil manufacture. This led to the development of processing techniques to refine lube oils by removing aromatics, asphalt, wax, and other contaminants using solvent-based methods. As technology evolved, fuels and lubes began to be sourced from the same feedstocks, and hydroprocessing techniques began to replace solvent-based processing. High-quality lubricants will improve fuel efficiency in automobiles, ultimately reducing hydrocarbon fuel demand.

Global base oil demand is expected to reach 42MM mt annually by 2030, according to Purvin & Gertz consultancy, up from 35MM mt annually in 2010. Although regional variations will remain, worldwide trends will exhibit consistent growth in Group II and III lubes, while Group I usage will be on the decline. Group I oils are expected to account for approximately 60% of all base oil consumption by 2020, with demand further reduced to around 40% by 2030. Higher quality Group II and III base oils, possessing a higher viscosity index (VI), lower volatility, and higher saturates content, will play an integral role in increasing energy efficiency and reducing exhaust from cars and commercial diesel vehicles, as legislation continues to address new emissions standards. The transition to more efficient Group II and III oils is a slow one, however. The increasing popularity of oil analysis as a part of routine vehicle maintenance, paired with the increased longevity of high quality oils, will result in less oil use per vehicle and lower demand for lubricants. When Group I oils are selling well, as they did in the first half of 2011, producers are hardly motivated to speed the transition to Group II and III. The subsequent drop in the price for Group I oils against the cost of feedstocks has reinforced the trend, but it has also left Group I producers struggling to make profits.

Overall, lube production technology providers are heavily shifting both their licensing and R&D strategies to meet increasing demand for high-quality lube oils, resulting in the phasing out of older solvent-based processing methods and shifting towards either hybrid configurations that combine solvent- and hydroprocessing-based units or complete hydroprocessing-based plants. Furthermore, the next generation of lube production technology may focus on gas-to-liquids (GTL) and other advanced processing techniques that utilize a Fischer-Tropsch (F-T) step to upgrade F-T wax into high-quality base oil products. Besides the upgrading of F-T wax, the processing of biofeeds using conventional refinery equipment might also be applied in the area of lube production to yield biolubricants. Additionally, the lube oil production section features the latest trends and technology offerings, including:

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